VP Racing Fuels to Brand Stations

Former Valero wholesale exec tapped to head up c-store rollout

SAN ANTONIO, Texas -- VP Racing Fuels Inc. has retained former Valero Energy Corp. executive Alan Cerwick to lead a national campaign to develop 300 branded convenience stores next year, according to a report by The San Antonio Business Journal. The company, a sponsor of auto races and teams, will sell product through about a dozen fuel distributors to independent station owners who agree to carry the VP logo.

A dozen independently owned stores in California already fly the VP brand, said the report.

VP is already holding discussions and plans to attend a [image-nocss] series of industry trade shows in the fall, the report added. It plans to officially unveil its retail brand in November.

VP hopes to build on its recognition among car and racing enthusiasts. "This company has got a 35-year history of producing quality fuels," VP president Cerwick, who headed Valero's 2002 brand launch as vice president of wholesale operations, told the newspaper. "We're well known by any car guy, any race fan. So, right off the bat, we have those people as product advocates."

VP is a key sponsor of nearly 60 racing series and sanctioning bodies, including NHRA Championship Drag Racing and American Le Mans. It also sponsors dozens of racing teams and venues--all of which bring exposure via cable networks, including ESPN and Speed Channel.

"We've got a good quality image, a good story and we have a marketing presence that lets us compete with the majors," Cerwick added.

In addition to standard-octane gasoline it obtains from other refiners, VP, through the network of participating stores, will offer its own products, including VP100, a 100-octane street-legal unleaded racing fuel; octane boosters; fuel system cleaners and small-engine fuel.

VP founder Steve Burns is selling his interest in VP to Cerwick as part of the former Valero executive's arrival, the report said. Burns will remain CEO and continue to direct all research and development for race fuel products.

Although VP's name is recognizable to race fans, it is entering a crowded market, the Business Journal said. Big refiners, including Cerwick's former employer, already boast a heavy retail presence, and grocers and other big-box retailers have expanded into the gasoline business.

"A lot of it will be dependent on how they're sourcing product and how they're marketing and branding," Ted Harper, energy analyst for Frost Investment Advisors, a unit of San Antonio-based Cullen/Frost Bankers, told the paper.

Although the market is competitive, Cerwick said, VP is not outlaying significant expansion capital. Developers will foot the cost of building their own stations, while the company makes sure they meet quality standards that keep them on par with Shell, Exxon and other brand leaders.

"This really is the most economical way for us to build brand recognition," Cerwick says. "We'll not own and operate a single store. That is not our objective."

VP employs more than 100 people spread between three manufacturing operations and fuel distribution facilities in Texas, Indiana, Georgia, Delaware and California. More than half of its employees are at its headquarters operations near San Antonio.

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